What happened
Prepaid card provider and payment processor PaySign (PAYS +1.57%) reported Q2 earnings last night, and it seems the company missed on both sales and earnings. Expected to earn $0.03 per share for the quarter on sales of $9.6 million, PaySign couldn't even break even -- although its profit rounded to $0.00 per share, on sales of just $6.4 million.
PaySign shares are down 28% as of 10:20 a.m. EDT Friday in consequence.
Image source: Getty Images.
So what
Analysts had told investors to expect a huge jump in sales in Q2 -- 46% -- but PaySign's revenues declined 26% instead. Gross profit margins plunged 700 basis points to 51.3%, pushing PaySign into a net loss of $219,234.
While that rounded to a $0 quarter per share, it was in fact a loss.
Now what
Rounding out the bad news, PaySign gave investors no guidance on when things might get better. In a statement typical of what other companies were saying three months ago, PaySign complained, "Given the uncertainty around the extent and timing of the potential future spread or mitigation of COVID-19 and around the imposition or relaxation of protective measures, management cannot reasonably estimate the impact to the Company's future results of operations, cash flows, or financial condition."
No wonder investors are upset.
